Give workers a stake to help stabilise mining sector

LONG-term stability in South Africa’s mining sector is likely to be a dream deferred. As things stand, labour tensions will continue to fester, to paraphrase the famous poet Langston Hughes.

Simply throwing money at the problem in the form of higher wage hikes is not a long-term solution.

There are deep structural issues in South Africa’s platinum and gold mining sectors, and some of these date back to the late 1800s. It is the deep-rooted structural issues that have not been carefully studied that continue to unsettle the country’s mining industry.

Analysis of the problem has been lazy. In August 2012, when the Marikana disaster happened, people argued emotionally the main cause of the problem was the growth in unsecured lending and the levels of indebtedness, which forced workers to demand more pay.

Despite the credit slowdown in unsecured lending, instability continued in South Africa’s platinum belt, and workers downed tools for over 20 weeks.

Because of a failure to look deep into the problems, some people, including leaders once part of the mining migrant labour system, are now resorting to conspiracy theories.

The argument is that there are foreign forces behind the instability.

People seem to have forgotten the South Africa mining system had problems even before the arrival of Liv Shange, of the Workers’ and Socialist Party.

So what are these deep structural issues that continue to grip South Africa’s mining system and economy?

In Gold and Workers 1886-1924: A People’s History of South Africa, Volume One, historian Luli Callinicos reminds us of the formulation of the migrant labour system in South Africa mining and the problems it would cause.

The Chamber of Mines, which was established in 1887, is a factor in the problem. It worked hand in hand with the government to benefit mine owners’ interests.

Through people like Cecil John Rhodes, who was both a prime minister of the Cape and a mining boss at Consolidated Gold Fields, laws were passed for the benefit of mine owners and to the detriment of black people.

Ms Callinicos says when diamond and gold mining started, thousands of men became migrant workers.

Many of them were black farmers who had to leave their homes to work for wages to pay the taxes imposed by white government. Most migrant workers led two lives.

They could not settle with their families in mining towns as it would have cost mining houses too much to build family houses.

They were prepared to house the single men, who left their families at home, in cheap compounds.

The Native Land Act of 1913, which restricted the land black people could own, led to overcrowding in the reserves, forcing people out to serve the mines as migrant labourers.

Deep level mining was also costly for the mining houses and required a lot of labourers to dig for resources.

To make profits, the mining houses cut wage costs, turning workers into cheap labourers, who had to look after themselves and their families in the reserves or in neighbouring countries.

The migrant labour system created a culture where black labourers had to look to the mining houses in the Transvaal for economic opportunities.

Despite the fact that many of the taxes which forced black farmers to seek work in the mines, no longer exist, the migrant labour system remains entrenched. Workers continue to demand higher wages, partly because they have to finance the cost of leading two lives.

They continue to supplement their income through debt because the wages are low.

The societal structures, created by government and mining houses more than a century ago, have also led to limited economic opportunities in provinces such as the Eastern Cape.

That, together with the lack of mineral resources in the former homelands, has forced many people to look to Gauteng and North West for economic opportunities.

Economic production is limited in those parts of South Africa which were once the native reserves, and banks have not innovated to advance funding for agricultural activity in rural areas.

Policy makers must be held liable for the flawed title deed structure in rural areas, which still denies black land-owners the opportunity of leveraging their land. People still do not have deeds for their land, and that has not helped in sourcing cheap secured credit needed to drive massive economic activity through agriculture.

Besides dealing with these structural challenges, the mining houses cannot bet on limited wage hikes to stabilise the sector.

The R12,500 wage demand is simply not enough in the long term, as many mine workers still lead two costly different lives.

The solution does not lie in wage hikes, which will be swallowed by inflation in the short term.

It partly lies in aligning the interests of the workers with the mine houses.

Give the mineworkers share options in the mining houses.

Let them have a stake in the capitalist system.

Appoint their leaders to board committees and, if possible, as nonexecutive directors.

Let them serve on board committees where they can contribute.

Fixing the historical structural challenges and making workers key shareholders and important stakeholders in the mining system could help stabilise the situation.